Buying a business: the documents to prepare before a deal

A business acquisition becomes easier to manage when each document has a clear job. Before asking for a contract, work out the decision you need to make, the evidence you need and who is responsible for checking it. A folder full of templates is not the same as a prepared buyer.

This guide is for someone considering the purchase of a private business in England and Wales. It is a preparation checklist, rather than a set of documents for completing a transaction.

Start with a one-page acquisition brief

Write down what you want to buy and why. Include the sector, location, size, management role you intend to take and the amount you can commit to the purchase and the first months of ownership. Distinguish the amount available for the price from the money needed for advisers, funding costs and operating the business.

For each target, record the legal name, company number where applicable, seller, proposed structure and the assets or shares under discussion. Add three assumptions that would make the purchase attractive and the evidence that would disprove them. That last column is often more useful than an enthusiastic summary.

Match the document to the stage

Keep evidence separate from conclusions

The British Business Bank describes due diligence as an appraisal of the proposed investment, covering financial, legal and operational matters among other areas. It also identifies the value of support from accountants, solicitors and people with operational expertise. Its due diligence guide provides a useful overview of these workstreams.

Your tracker should say more than “accounts received”. Use columns for the question, document reference, person reviewing it, finding, action and status. A seller's forecast is evidence of the seller's expectations. It does not establish that customers will renew, margins will hold or cash will arrive when required.

A simple example: the largest customer

Suppose the seller says a long-standing customer provides a substantial part of turnover. Ask for the contract, renewal history and a reconciliation of sales to receipts. Ask your advisers to check whether a sale affects the contract and who may contact the customer. Record any consent or renewal needed before completion. The useful output is a decision about dependency, rather than a tick beside “customer contracts”.

Give your advisers a usable handover

Provide a short summary of the commercial agreement, a dated version of the heads, the latest questions list and a separate list of unresolved matters. Keep one controlled set of documents. Name files clearly and record who supplied them. Avoid sending competing versions of the same agreement without explaining what changed.

Ask your transaction solicitor to define the documents and work required for the actual sale, including the purchase agreement, disclosure process and completion arrangements. The exact list depends on the transaction. DocuDraft's buyer materials support preparation; they do not provide live SPA negotiation or completion management.

Your next step

Use the free business buyer checklist to organise your starting information. Then read what acquisition heads of terms should resolve and inspect the Business Buyer Toolkit contents. For the wider process, the Buying a Business book is a separate guide.